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Importance of Business Finance for Management Students


A business depends on many factors and the most important of them is finance. Whether your company is large or small, money is the oxygen for survival, growth as well as stability. Planning definitely provides framework but if you talk about infrastructure, finance is the only answer for development and diversification of business. It assists organizations to take advantages of opportunities, employ workers to attain business goals, acquire licenses and offer support through good and bad times. Hence, finance can be defined as the science of managing funds for crucial purposes which include paying wages, clearing debts and meeting up other immediate necessities.

Corporate or business finance works on matters like cash flow management, debt management, investments, credit analysis and other financial decision that organizations need to take. It is aimed at enhancing the corporate values by managing risk involved in investments. Corporate finance looks into matters related to dividends, taxation and so on. Research and development is the key to create an identity through innovativeness. But without the financial support a company cannot process to bring changes in its old products. A company requires promoting itself through advertising, sales, distribution and it cannot be conducted without finance. Therefore, it is the backbone to run smoothly in the extreme competitive marketplace.

Employees are the moving ambassadors for any company. Building up a good rapport is beneficial for company reputation. Moreover, these employees should be motivated and it is through financial incentives, such as bonus, higher salaries as well as transport facilities, canteen facilities and others. A company has to work on increasing its resources to maintain a balance and set up a firm infrastructure. Hence, it is advised to prepare a budget and spend accordingly, making long term as well as short term plans for the company benefits. Financial planning involves ability to deal with the economic cycles at any point of time.

Business Finance happens to be one of the core subjects of MBA. As a management student, understanding the allocation of resources is vital. Along with that a thorough knowledge in law is a prerequisite because the money should be fairly utilized which is the only way to avoid discrepancies. Hence, a time to time injection of cash is the unavoidable phenomena which can be accumulated through marketing campaign and bringing awareness to increase customer base or a necessary top up of working capital to keep the business wheels on go.

Therefore, a student who has specialized in the finance program gets wide career opportunities both in financial and non-financial enterprises, because handling of fund is an essential requirement in every sector. The students are trained in financial analysis, cash management, and credit management allowing them to deal with any complex fiscal issues. The business finance program trains students to develop the ability to get acquainted with the time when financing an operation can bring success. The skill of tackling finance in a business ultimately decides the dominance and failure of an enterprise. So, it can be concluded that finance and business run parallel to one another and they are interdependent in the end.